I know this thread is a bit old, but here's a reply anyway.
OP, I can almost assure you the problem is buffer-related. If the buffer on your soundcard is set too low or high, you'll get the weird, choppy, distorted sound you're describing.
If you're using a WDM or other Windows-based driver, your buffer will have to be set significantly higher than if you're using ASIO. When I used WDM, I believe I had mine set to around 5,000.
If you use ASIO, which is recommended, it can be much lower. 512 or 256, even.
If you're not getting sound when using ASIO4ALL, try tweaking the settings from within ASIO's GUI. I've found that you have to enable and/or disable some aspects of your sound card to get sound sometimes. For example, on my laptop, I have to disable SPDIF output, enable HIGH-DEFINITION SPEAKER output, and make sure they both have the green, lit-up "power" icons next to them.
Just play around with ASIO, I assure you it'll work great when you figure it out!
Oh, and also, CLOSE ALL OTHER AUDIO-RELATED PROGRAMS BEFORE OPENING SAMPLITUDE. This includes iTunes, Winamp, etc.!